UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 01/18/2006
MAINSTREET BANKSHARES INC
(Exact name of registrant as specified in its charter)
Commission File Number: 333-86993
VA | | 54-1956616 |
(State or other jurisdiction of | | (IRS Employer |
incorporation) | | Identification No.) |
730 East Church Street, Suite 30, Martinsville, VA 24112
(Address of principal executive offices, including zip code)
276-632-8054
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Information to be included in the report
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
On January 18, 2006, C. R. McCullar, President and Chief Executive Officer of MainStreet BankShares, Inc. ("MainStreet") announced his retirement effective April 30, 2006. Mr. McCullar is presently a director of MainStreet and will remain on the Board. His term expires in April 2008. On the same date, the board of Directors appointed Larry A. Heaton to succeed Mr. McCullar as President and Chief Executive Officer of MainStreet beginning May, 1, 2006. Larry A. Heaton, age 48, has been President, Chief Executive Officer and Chairman of the Board of Franklin Community Bank, N.A. ("Franklin Bank"), a wholly-owned subsidiary of MainStreet since September 16, 2002. Mr. Heaton has been a director of MainStreet since October 2002. From October 2000 until September 2002, Mr. Heaton was a consultant for MainStreet BankShares, Inc. in connection with the organization of Franklin Bank.
MainStreet's executive officers and directors, and other corporations, business organizatio ns, and persons with which some of MainStreet's executive officers and directors are associated have banking relationships with Franklin Bank. In this respect Mr. Heaton has an outstanding loan with Franklin Bank made in the ordinary course of business on substantially the same terms, including interest rates and security for loans, as those prevailing at the time in comparable transactions with others and did not involve more than the normal risk of collectibility or present other unfavorable features. Currently, the balance of this loan is $109,987 with a maximum credit of $110,000.
An employment agreement was entered into on December 30, 2005, effective January 1, 2006 by and between MainStreet, Franklin Bank, and Mr. Heaton as President and Chief Executive Officer of Franklin Bank. Some of the terms of the employment agreement are as follows:
The agreement has a rolling one year term that unless terminated at least 90 days prior to each anniversary date, is extended automatically for an addition al one year.
If Mr. Heaton's employment is terminated without cause Franklin Bank is obligated to pay Mr. Heaton a lump sum payment equal to: (a) the present value of the total base salary in effect at the time of termination through the remaining term of employment and (b) the present value of Franklin Bank's cost of all welfare and pension benefits then being provided to Mr. Heaton calculated as if he continued in employment through the remaining term of employment and (c) any incentive benefits accrued as of the date of termination.
If Mr. Heaton's employment is terminated for cause or he voluntarily terminates employment, Mr. Heaton will receive his full base salary through the date of termination.
Upon a change of control, Mr. Heaton may choose either of the following: (a) to enter into a replacement employment agreement mutually satisfactory to him and the company acquiring control which shall replace in full the subject employment agreement or (b) to resign his employment, terminate the emp loyment agreement and, subject to certain limitations, receive as severance benefits the continuation for the 36 months immediately following such written notice his salary and benefits excluding any non-accrued incentives.
The agreement provides for a non competition obligation for 1 year after termination of employment or during any longer period in which he is receiving severance benefits after a change of control within a 25 mile radius of the main office of Franklin Bank.
Item 9.01. Financial Statements and Exhibits
(d) ExhibitsSee index to exhibits.
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | MAINSTREET BANKSHARES INC |
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| Date: January 19, 2006 | | | | By: | | /s/ C. R. McCullar
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| | | | | | | | | C. R. McCullar |
| | | | | | | | | President and Chief Executive Officer |
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| |
| | | | | | MAINSTREET BANKSHARES INC |
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| Date: January 19, 2006 | | | | By: | | /s/ Brenda H. Smith
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| | | | | | | | | Brenda H. Smith |
| | | | | | | | | Executive Vice President/Chief Financial Officer/Corporate Secretary |
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Exhibit Index
Exhibit No.
| | Description
|
| EX-99.1 | | Press release dated January 19, 2006 announcing the retirement of C. R. McCullar and appointment of Larry A. Heaton |
